Adhesion between neighbouring cells is an important process that is tightly controlled. Epithelial adherens junctions have a crucial role in cell–cell adhesion and are regulated by tyrosine phosphorylation. Junctional integrity is controlled by the homophilic binding of E-cadherin, which activates tyrosine kinases such as Src. Previous studies have also implicated protein tyrosine phosphatases (PTPs) in cadherin-based adhesion and signalling, but many details remain unexplored. On page 2420, Véronique Dubreuil, Jan Sap and colleagues investigate the role of the transmembrane receptor protein tyrosine phosphatase RPTPα, a known physiological regulator of cellular (c)-Src. The authors establish that RPTPα localises to cadherin-based intercellular junctions in epithelial cells, where it is in close molecular proximity to E-cadherin. Knockdown of RPTPα demonstrates that RPTPα is required for the integrity and organisation of E-cadherin-based intercellular junctions and the underlying actin cytoskeleton. Moreover, RPTPα regulates cadherin-based junctions by affecting cortactin tyrosine phosphorylation. Next, the authors show that RPTPα contributes to Src activity in epithelial cells and controls tyrosine phosphorylation at epithelial junctions. They also provide evidence that RPTPα is required for the activation of Src downstream of E-cadherin. The authors therefore conclude that RPTPα contributes to the regulation of E-cadherin-mediated (c)-Src activation and the subsequent cortactin tyrosine phosphorylation, which crucially influences E-cadherin-based cell–cell junctions.